Westport Fuel Systems Inc. (WPRT): Business Model Canvas [Dec-2025 Updated]

You're looking at a company that just made a massive pivot; after shedding its Light-Duty segment, the core of the business is now laser-focused on decarbonizing heavy transport with its High-Pressure Direct Injection (HPDI) tech. Honestly, seeing the Q3 2025 results-like the $19.3 million in sales coming through the Cespira joint venture with Volvo Group, which helped them hit a 31% gross margin-tells you exactly where the new value is concentrated. This canvas cuts through the noise to show you the key partnerships, the R&D spend driving that future, and the lean operational structure that remains. Dive in below to see the precise building blocks of this leaner, cleaner engine strategy for the road ahead.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that drive Westport Fuel Systems Inc.'s strategy post-divestiture. These partnerships are crucial because they provide access to technology scaling, market penetration, and necessary capital.

Cespira joint venture with Volvo Group for HPDI system commercialization

The joint venture, Cespira, with the Volvo Group, is central to Westport Fuel Systems Inc.'s heavy-duty focus, specifically accelerating the High Pressure Direct Injection (HPDI) fuel system technology. Volvo Group acquired a 45% interest in the JV for approximately US$28 million payable upon closing, plus up to an additional US$45 million as an earn out based on performance. As of late 2025, Cespira is actively engaging with other Original Equipment Manufacturers (OEMs). On October 14, 2025, Cespira signed an agreement with a leading OEM and received full payment to supply several hundred sets of a key HPDI component for a customer truck trial. The LNG HPDI technology, an evolution of this system, is currently operating in more than 30 countries, powering over 9,000 trucks worldwide. For the nine months ended September 30, 2025, Cespira incurred losses of $19.8 million as it scales operations. Still, Cespira showed strong revenue growth, reporting $12 million in revenue for Q2 2025, up from $4.1 million the prior year, and a 19% revenue increase for the quarter ending September 30, 2025.

The key elements of this partnership structure are:

• Volvo Group ownership stake: 45%.
• Maximum potential earn-out payment from Volvo Group: US$45 million.
• Cespira Q2 2025 revenue: $12 million.
• Cespira September 30, 2025, nine-month loss: $19.8 million.

Global Original Equipment Manufacturers (OEMs) for component supply

Westport Fuel Systems Inc.'s High-Pressure Controls & Systems segment relies on established relationships with global OEMs for its fuel-agnostic components. This business currently sells into China, Europe, and North America. To be precise, China accounts for over 50% of the High-Pressure Controls & Systems revenue. Previously, Westport secured a development contract with a global heavy truck manufacturer, valued at an estimated USD$33 million, funded by that OEM, for the Next Generation LNG HPDI fuel system. Separately, contracts with another global OEM for Euro 6 and Euro 7 LPG fuel systems are scheduled to expire between 2026 and 2028. This shows a mix of ongoing development funding and legacy contract timelines you need to track.

Here's a quick look at the OEM market exposure and past contract values:

Strategic partners for developing CNG and hydrogen platforms

The focus on future fuels involves leveraging existing technology across different fuel types. Westport Fuel Systems Inc. announced a proprietary CNG solution on November 6, 2025, designed to expand HPDI's addressable market, especially in North America where CNG infrastructure is abundant. Cespira's mandate also includes making low-carbon fuels like hydrogen and Renewable Natural Gas (RNG) work in heavy transport engines. The company's Q1 2025 results noted a slowdown in the hydrogen industry impacting demand for related components.

Heliaca Investments, the purchaser of the divested Light-Duty segment

The divestiture of the Light-Duty Segment to a wholly-owned investment vehicle of Heliaca Investments Coöperatief U.A. closed on July 29, 2025. This was a significant financial event, providing capital to sharpen the focus on heavy-duty and industrial applications. The transaction provided a base purchase price of approximately $79.5 million (or €67.7 million), subject to adjustments, plus potential earnouts up to a revised estimate of $3.9 million (or €3.3 million). For context, the initial agreement announced on March 31, 2025, specified a base price of $73.1 million and potential earnouts up to $6.5 million. In Q3 2025, Westport Fuel Systems Inc. recorded $26.0 million in cash received from the sale in its investing activities. The divestiture also meant that Westport Fuel Systems Italia S.r.l., which includes the Light-Duty OEM, delayed OEM, and independent aftermarket businesses, formally separated from the Vancouver-headquartered Westport on July 29, 2025.

The proceeds from the sale definitely helped the balance sheet. Cash and cash equivalents stood at $33.1 million at the end of Q3 2025, up from $14.8 million at the end of December 31, 2024.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Key Activities

You're focused on the core engine of Westport Fuel Systems Inc. (WPRT) right now, which is all about making the technology work and getting the operations aligned for the new, leaner structure post-divestiture. Here's the breakdown of the key activities Westport Fuel Systems Inc. is driving as of late 2025.

Research and development (R&D) of HPDI and high-pressure components

Westport Fuel Systems Inc. is heavily invested in developing its core technologies, knowing that OEM customers pay for this work at the start of production. You should know that R&D money is being spent over the next three years, with customer payment tied to production kickoff. The company plans to open its state-of-the-art Hydrogen Innovation Center and manufacturing facility in China in late 2025 to target hydrogen growth there. For the hydrogen HPDI platform specifically, trials are set for 2026, with a commercial launch targeted for 2030. This contrasts with the near-term focus on LNG and CNG sales in other markets. In the first quarter of 2025, operating expenditures, which included R&D and SG&A expenses, dropped by $8 million compared to the prior year period. However, for the third quarter ended September 30, 2025, net loss from continuing operations was impacted by an increase in operating expenditures in research & development and selling, general and administrative expenses.

Manufacturing and assembly of fuel-agnostic control systems

The High-Pressure Controls & Systems (HPCS) segment is responsible for the off-engine components, like hydrogen valves and regulators. This activity has seen market headwinds, specifically a global hydrogen market slowdown impacting demand for these components. HPCS revenue for the three months ended June 30, 2025, was $2.9 million, down from $3.6 million for the same period in 2024. Gross profit for that quarter fell to $0.1 million, representing only 3% of revenue, compared to 31% of revenue, or $1.1 million, in the prior year. By the third quarter of 2025, HPCS revenue was $1.6 million, compared to $1.8 million in Q3 2024, with gross profit turning negative at negative $1.1 million. Interestingly, as of Q2 2025, over 50% of HPCS revenue was coming from China, almost entirely from hydrogen components.

Commercialization and scaling of the Cespira HPDI system

Scaling the Cespira HPDI system, the joint venture with Volvo Group, is a major activity. HPDI fuel systems are commercially viable and currently on the road in Europe, with volumes that grew by 25% in 2024. Westport Fuel Systems Inc. reports that HPDI technology is now deployed in approximately 9,000 heavy-duty trucks globally, meeting EU6 emissions standards. Cespira generated $16.7 million in revenue for the first quarter of 2025, with a gross profit of $0.5 million for that period. The system is fuel agnostic, capable of running on hydrogen, CNG, LNG, and RNG. A significant step in commercialization occurred on October 14, 2025, when Cespira signed an agreement and received full payment to supply several hundred sets of a key component for a customer truck trial with a leading OEM. Furthermore, Westport revealed a new proprietary CNG solution leveraging advanced high-pressure storage technology, with field testing expected to start in 2026.

Here are the key financial metrics for Cespira in the first half of 2025:

Operational streamlining and cost-cutting initiatives

The strategic shift involved divesting the Light-Duty Segment, which closed on July 29, 2025, for approximately $60 million in total consideration. This divestiture reduced outstanding debt by about $24.3 million, representing debt held by the segment, and the segment held $15.3 million in cash on the balance sheet at June 30, 2025. You saw immediate benefits in Q1 2025, where operating expenditures dropped by $8 million year-over-year, leading to an operating income of $1.7 million versus an operating loss of $12.5 million the prior year. Adjusted EBITDA improved substantially to nil in Q1 2025 from a loss of $6.6 million in Q1 2024. The company ended Q3 2025 with $33.1 million in cash and less than $4 million in outstanding debt, which matures in September 2026. The gross margin for Q3 2025 improved to 31% compared to 14% in Q3 2024, driven by higher margin engineering services revenue. In Q3 2025, the company incurred one-time costs of approximately $1 million for severance and restructuring.

Relocating manufacturing to Canada and China for supply chain simplification

A key operational activity involves relocating European HPCS manufacturing from Italy to new sites in Canada and China to simplify the supply chain. This relocation effort contributed to the revenue decrease in Q3 2025, as lower sales occurred during the plant move. The capital for Westport Fuel Systems Inc.'s new hydrogen innovation centre in China is mostly spent, with remaining outlays included in the $15 million Q3 cash outflow that also covers Cespira funding and the relocation of European HPCS manufacturing. As of Q3 2025, the company confirmed it is in the process of moving these production lines to sites in Canada and China.

• The relocation from Italy to Canada and China impacted Q3 2025 revenue.
• The move is part of the overall strategy to right size current operations following the Light-Duty divestiture.
• The new China facility is planned to open in late 2025.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Key Resources

The Key Resources for Westport Fuel Systems Inc. center on proprietary technology, specialized human capital, and a recently strengthened financial base following strategic divestitures.

High-Pressure Direct Injection (HPDI) intellectual property.

Westport Fuel Systems Inc. possesses intellectual property critical to the next generation of heavy-duty transportation solutions. This centers on the High Pressure Direct Injection (HPDI) fuel system technology, which is a core competency housed within the Cespira joint venture. The company's strategy is explicitly aimed at accelerating the adoption of these HPDI systems in target markets.

Expertise in high-pressure fuel control systems and components.

A significant resource is the deep expertise residing in the High Pressure Controls & Systems business segment. This segment focuses on developing high-pressure components essential for performance and reliability across various clean fuel platforms. As of the third quarter of 2025, the revenue for this specific segment was $1.6 million for the quarter.

Cash and equivalents of $33.1 million as of Q3 2025.

The balance sheet position was notably enhanced by the Light-Duty segment divestiture, improving liquidity. As of September 30, 2025, Westport Fuel Systems Inc. held $33.1 million in cash and cash equivalents. This compares to $14.8 million held at the close of 2024. Furthermore, outstanding debt was reduced to less than $4 million.

To give you a clearer picture of the financial context following recent strategic moves, here are some comparative figures from the Q3 2025 results:

Global manufacturing and supply chain infrastructure.

Westport Fuel Systems Inc. is actively reshaping its manufacturing footprint to align with core markets and simplify operations. This involves a strategic relocation of European high-pressure controls & systems manufacturing from Italy to new facilities in Canada and China. The company anticipates these facilities will begin producing initial product late in 2025. Specifically, a state-of-the-art Hydrogen Innovation Center and manufacturing facility is planned to open in China in late 2025 to serve the growing hydrogen transportation market there.

The infrastructure focus includes:

• Relocation of European manufacturing to Canada and China.
• Opening of a new Hydrogen Innovation Center in China.
• Targeted production start-up in new facilities by year-end 2025.
• Focus on serving North American markets with new CNG solutions.

The company also has a joint venture, Cespira, which generated revenue of $19.3 million in Q3 2025, representing a 19% increase year-over-year. Westport made capital contributions to this joint venture totaling $11.0 million during Q3 2025.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Value Propositions

Westport Fuel Systems Inc. provides affordable, low-carbon solutions specifically targeting the hard-to-decarbonize transport sector, which includes heavy-duty trucking.

The core High-Pressure Direct Injection (HPDI) fuel system, delivered through the Cespira joint venture with the Volvo Group, is engineered to deliver performance comparable to diesel engines while operating on natural gas or renewable natural gas (RNG). This technology is now operating in more than 30 countries, powering over 9,000 trucks worldwide using the liquefied natural gas (LNG) version.

The value proposition centers on significant reduction in greenhouse gas (GHG) emissions. For instance, the HPDI fuel system, when utilizing hydrogen, delivers diesel-like torque and power with up to 98 percent lower CO₂ emissions.

Westport Fuel Systems Inc. is advancing fuel-agnostic heavy-duty transport related technologies through Cespira, making its components critical for Original Equipment Manufacturers (OEMs) looking to meet evolving standards. The Cespira joint venture itself reported revenue of $19.3 million in the third quarter of 2025, marking a 19% increase over the same period last year.

Fleet operators are prioritizing cost effectiveness and total cost of ownership (TCO) over emissions alone, and Westport Fuel Systems Inc. positions its HPDI system as the most affordable, commercially viable option that maintains performance. In North America, fleet operators are noting the high energy costs of battery electric vehicles, citing costs in excess of $0.50 - $0.60/kWh versus a projected $0.15/kWh for electric vehicles.

The company is expanding its offering with a proprietary Compressed Natural Gas (CNG) solution, designed to enhance accessibility and economic advantages in markets favoring CNG, with field testing expected to begin in 2026.

Here's a quick look at the operational and financial momentum supporting these value propositions as of late 2025:

The focus on the heavy-duty segment is clear, especially following the divestiture of the Light-Duty Segment in July 2025. This strategic shift is intended to drive better financial outcomes, as evidenced by the gross margin improvement from 14% in Q3 2024 to 31% in Q3 2025 for continuing operations.

The value proposition is further supported by the company's commitment to a mix of solutions for the near term:

• Affordable, low-carbon solutions for hard-to-decarbonize transport.
• Diesel-like performance using natural gas or RNG.
• Significant reduction in greenhouse gas (GHG) emissions.
• Critical components for OEM fuel-agnostic engine platforms.
• Lower total cost of ownership for commercial fleets.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Customer Relationships

You're looking at how Westport Fuel Systems Inc. manages its key relationships now that the company has sharpened its focus post-Light-Duty Segment divestiture on July 29, 2025. The relationship strategy is heavily weighted toward deep, strategic collaboration in the heavy-duty and industrial sectors.

Deep, long-term strategic partnerships with major OEMs.

The relationship with Volvo Group, primarily through the Cespira joint venture, is central. This partnership is key to delivering the High Pressure Direct Injection (HPDI) fuel system. We saw Cespira increase its revenue by 19% year-over-year in Q3 2025, reaching $19.3 million for the quarter, which shows OEM adoption momentum. To be fair, Cespira incurred losses of $6.0 million for the three months ending September 30, 2025, as it scales, but the revenue growth is the relationship indicator here. Volvo has publicly noted rising adoption of the Cespira fuel system in Europe, which is a strong sign of OEM commitment. The company's technologies support a wide range of clean fuels, empowering OEMs to meet performance demands and regulatory requirements cost-effectively. Westport Fuel Systems Inc. develops and supplies advanced LPG, CNG, LNG and H2 systems and components for OEM, DOEM, and AM sectors worldwide.

• Westport Fuel Systems Inc. main customers are in automotive, transportation, and off-road segments.
• The Cespira joint venture with Volvo Group is a core strategic relationship.
• The company is focused on hard-to-decarbonize applications in heavy-duty trucking.

Dedicated engineering service and technical support.

The value of the engineering relationship is showing up in margin performance, even as direct revenue from some legacy support agreements winds down. For instance, the gross margin for the entire company in Q3 2025 hit 31%, a significant jump from 14% in Q3 2024. This improvement was explicitly driven by higher margin engineering services revenue. Still, the High Pressure Controls & Systems segment, which provides off-engine support components, saw revenue of $1.6 million in Q3 2025, a slight decrease from $2.4 million in Q3 2024. The company is in the process of moving production lines for this segment from Italy to sites in Canada and China, which is a major operational undertaking tied to customer continuity.

Direct sales and technical consultation to commercial fleets.

While specific direct fleet sales numbers aren't broken out, the focus on commercial mobility means consultation is inherent in the OEM relationship. The strategic pivot post-divestiture is to concentrate on the larger, higher-growth opportunities in commercial mobility and industrial applications. The success of the HPDI technology is a proxy for fleet interest; gas-powered truck sales using HPDI technology were up over 25% in 2024. This indicates strong pull from the commercial end-users, translating into OEM orders.

Joint development and customer truck trial programs.

Westport Fuel Systems Inc. actively engages in joint development to prove out its technology in real-world conditions. As recently as November 2025, Cespira signed a new agreement with an OEM specifically to trial its HPDI components in heavy-duty trucks. This follows a previous announcement that Cespira signed an agreement to supply components for a customer truck trial. The company introduced a new solution for natural gas heavy-duty transport on November 6, 2025, aiming to expand its market reach in North America, which requires fleet validation.

Here's a look at the financial context surrounding the core heavy-duty/JV business post-divestiture:

The divestiture of the Light-Duty Segment, which closed for a base price of approximately $79.5 million (€67.7 million), allows Westport Fuel Systems Inc. to better fund these development and trial programs aligned with its core heavy-duty strategy. Finance: draft 13-week cash view by Friday.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Channels

Direct sales to Original Equipment Manufacturers (OEMs) are now primarily channeled through the remaining core business segments following the Light-Duty segment divestiture, which generated $76.4 million in revenue in Q2 2025 before its sale on July 29, 2025.

The Heavy-Duty OEM segment revenue for the three months ended September 30, 2025, was $1.6 million, a decrease from $4.9 million in the same quarter last year, reflecting the end of the transitional service agreement with Cespira at the close of Q2 2025. For the first quarter of 2025, the Heavy-Duty OEM segment revenue was $5.4 million.

The Cespira joint venture utilizes a dedicated sales and distribution network, showing significant growth in its own right. Cespira revenue reached $19.3 million for the three months ended September 30, 2025, representing a 19% year-over-year increase. For the first quarter of 2025, Cespira revenues were $16.7 million. Cespira incurred operating losses of $19.8 million for the nine months ended September 30, 2025.

The global supply chain for High-Pressure Controls & Systems (HPC&S) is undergoing a geographic shift. Manufacturing is transitioning from Italy to Canada and China, with new facilities expected online by the end of 2025. China currently accounts for over 50% of the High-Pressure Controls & Systems revenue. The revenue for the HPC&S segment in Q3 2025 was $1.6 million, down from $1.8 million in Q3 2024. HPC&S revenue for Q1 2025 was $1.4 million.

Component sales for OEM validation and truck trials are active through Cespira. Cespira signed an agreement with a leading OEM and received full payment for its HPDI components to be used in a customer truck trial. Cespira is set to deliver several hundred sets of a key component for this trial. Westport anticipates feedback from this new OEM trial by mid-2026.

Here's a look at the segment revenue performance through Q3 2025:

The company is also expanding customer demonstration programs for its new CNG solution, with real-world fleet applications planned for 2026.

• Cash and cash equivalents stood at $33.1 million as of September 30, 2025.
• Cash capital contributions into Cespira for investing activities totaled $11.0 million in Q3 2025.
• The Light-Duty segment divestiture provided $26.0 million in cash received during Q3 2025 investing activities.
• Planned SG&A reductions for 2026 are 15%.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Customer Segments

You're looking at Westport Fuel Systems Inc. (WPRT) after a major strategic simplification, so the customer focus is much narrower and centered on high-impact, hard-to-decarbonize applications. The core business, as of the third quarter of 2025, is clearly weighted toward heavy-duty transport solutions, particularly through its joint venture, Cespira.

Heavy-Duty Truck OEMs in Europe, India, and East Asia.

This segment represents the most immediate, quantifiable customer base, largely driven by the High Pressure Direct Injection (HPDI) technology partnership with the Volvo Group via Cespira. The focus here is on securing commercialization pathways with major Original Equipment Manufacturers (OEMs).

• Cespira, the joint venture, generated $19.3 million in revenue for the third quarter of 2025.
• Cespira's revenue saw a 19% increase over the same period last year (Q3 2024).
• Westport Fuel Systems Inc. delivered several hundred sets of a key HPDI component in October 2025 to a leading OEM for a customer truck trial.
• The company is moving manufacturing operations to Canada and China in Q3 2025, suggesting these regions are key for supply chain alignment with current or future OEM customers.
• Sales to European customers showed an increase in the first half of 2025.

Here's a quick look at the Cespira activity supporting this segment as of late 2025:

Commercial transportation fleets seeking decarbonization.

Fleets are the end-users who ultimately drive OEM adoption, demanding solutions that meet performance needs while lowering emissions and operating costs. The strategy is to provide the technology that allows fleets to use cleaner fuels like natural gas, renewable natural gas (RNG), and hydrogen.

• The company's technologies support a variety of clean fuels, including liquified natural gas, compressed natural gas, renewable natural gas, and hydrogen.
• Long-haul operations driving more than 100,000 annual kilometres represent almost 90% of CO2 emissions from the on-road freight sector, highlighting the target for HPDI solutions.
• The company is positioning its solutions as an affordable pathway to meet heavy-duty CO2 emission reduction requirements, such as the Euro VI Step E regulations that took effect in 2024.

Industrial and off-road equipment manufacturers.

Following the divestiture of the Light-Duty segment, Westport Fuel Systems Inc. explicitly stated its focus on commercial transportation and industrial applications as sectors where its solutions create the greatest potential for long-term growth. This segment is served by the High Pressure Controls & Systems business.

• The company is concentrating on high-impact opportunities in industrial applications post-divestiture.
• High-Pressure Controls & Systems segment revenue for Q3 2025 was $1.6 million, compared to $1.8 million in Q3 2024.
• The company is in the process of moving manufacturing lines for this segment from Italy to Canada and China to be closer to customers.

OEMs developing fuel-agnostic engine platforms.

This customer group relies on Westport Fuel Systems Inc. for critical components that allow a single engine platform to run on multiple fuels, which is a key enabler for future-proofing vehicle designs against evolving fuel mandates.

• Westport Fuel Systems Inc.'s High-Pressure Controls & Systems segment delivers OEMs with critical components for fuel-agnostic platforms.
• The HPDI 2.0 technology was developed to allow long-haul trucks to meet performance demands compared to diesel and outperform spark-ignited LNG trucks.
• The company's strategy is to provide solutions that help partners achieve sustainability goals without compromising performance or cost-efficiency.

Finance: draft 13-week cash view by Friday.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Cost Structure

The Cost Structure for Westport Fuel Systems Inc. is heavily weighted toward innovation and the operational realities of its joint venture and recent strategic shifts, as of late 2025.

High R&D spending for HPDI and hydrogen component development remains a core cost driver, reflecting the commitment to next-generation technology. While specific R&D dollar amounts for Q3 2025 aren't isolated, the financial results noted an increase in operating expenditures in research & development impacting Adjusted EBITDA for the quarter. This spending supports the core HPDI technology and the broader hydrogen component roadmap.

Manufacturing and material costs for high-pressure systems are a direct factor in gross profitability. For the nine months ended September 30, 2025, the gross margin decreased to 17% of revenue, down from 26% in the same prior-year period, which was explicitly linked to an increase in material costs.

The Cespira joint venture continues to be a significant cost center, though its scale is growing. The venture is still scaling operations, leading to ongoing losses.

General and administrative (G&A) expenses, alongside R&D, saw an increase in operating expenditures in Q3 2025. However, the company has been executing targeted changes to its staffing cost structure post-divestiture, aiming for a leaner organization.

The costs associated with plant relocation to Canada and China are reflected in operational disruptions. Specifically, revenue for the High-Pressure Controls & Systems segment in Q3 2025 was $1.6 million, compared to $1.8 million in Q3 2024, with the decrease primarily driven by lower sales during the plant relocation from Italy. These relocation costs also impacted the Adjusted EBITDA for the quarter.

The balance sheet strength post-divestiture provides flexibility to manage these costs:

• Cash and cash equivalents as of September 30, 2025, totaled $33.1 million.
• Cash received from the Light-Duty segment sale in Q3 2025 was $26.0 million.
• Remaining outstanding debt (EDC term loan) was $3.9 million as of September 30, 2025.

Westport Fuel Systems Inc. (WPRT) - Canvas Business Model: Revenue Streams

You're looking at the revenue picture for Westport Fuel Systems Inc. (WPRT) as of the third quarter of 2025, post-Light-Duty segment sale. The focus has clearly shifted to the core heavy-duty and alternative fuel systems business, which is where the current top-line numbers are coming from. Honestly, the revenue profile is much leaner now, but the margin story is telling a different tale.

The revenue streams are now concentrated in a few key areas, reflecting the strategic simplification. Here's the quick math on the Q3 2025 performance for the continuing operations:

The sales of HPDI fuel systems through the Cespira joint venture were reported at $19.3 million for the three months ended September 30, 2025, which was an increase from the prior year quarter, driven by higher volumes of systems sold. Still, Cespira itself incurred losses of $6.0 million for that same three-month period as it scales up.

The High-Pressure Controls & Systems segment contributed revenue of $1.6 million in Q3 2025. It's important to note that the transitional service agreement with Cespira ended at the close of Q2 2025, meaning the Q3 2025 revenue for the Heavy-Duty OEM segment was effectively nil, as expected.

The overall gross margin performance shows a significant shift in the revenue mix. For Q3 2025, the company achieved a gross margin of 31% of revenue, a big jump from 14% in Q3 2024. This improvement is directly attributed to the higher-margin engineering service revenue recognized in the quarter. The gross profit for the quarter was $0.5 million, up from $0.4 million in Q3 2024.

Beyond the operational revenue, the balance sheet is being bolstered by proceeds from the strategic realignment:

• Deferred payments from the Light-Duty segment divestiture, with $8.5 million expected in September 2025.
• Proceeds held in escrow from the same divestiture, which are scheduled for release in tranches through year-end 2025, January 2026, January 2027, and May 2027.

Finance: draft 13-week cash view by Friday.